Amid rout in Sensex and Nifty, investors who have invested in good quality, market leaders, low debt, high cash generating companies need not worry.
Amid rout on Dalal Street today, equity market benchmarks Sensex and Nifty extended morning losses, and ended more than 8 per cent lower on Thursday. In a fresh bout of selling in the last hour of the trade, Sensex traded about 3,000 points or 8.4 per cent lower to end at 32,708 points. Broader Nifty 50 index finished at 9,633, down 825points or 7.89 per cent. At this time, when Sensex and Nifty have entered the bear phase, analysts suggest investors to wait for markets to stabilise. “The present levels of the markets are of course 20% off their recent peaks. However, that being said, it would not be prudent for the short-term investors to try and enter in an attempt to make a bargain buying. They should wait for the markets to stabilize, even if that means buying at slightly higher levels,” technical analyst Milan Vaishnav said. Share markets may slide further but may do so after some technical pullbacks or some wide-ranged consolidation, he added.
As far as further fall in the markets is concerned, it is difficult to predict, and neither any recovery could be timed, said Narendra Solanki, Head Fundamental Research-Investment Services, Anand Rathi Shares and Stock Brokers. The rout in Indian markets has been caused due to risk off trade from global virus scare and market’s should stabilize in sometime, Solanki said. He added that investors who have invested in good quality, market leaders, low debt, high cash generating companies need not worry. “Any bounce back when it would come, then these would be the stocks that would lead the recovery,” Solanki said.
Rout in Indian market indices was witnessed a day after the World Health Organisation (WHO) declared novel coronavirus outbreak a global pandemic. Meanwhile another analyst suggested to stay away from this market for a while until the volatility settles. “At the moment, investors must look at stocks which have not fallen as much from their highs, as these are the ones which could withstand the wind better than the others due to their strong fundamentals,” Amit Gupta, CO-Founder and CEO, TradingBells said. Following the WHO declaration on coronavirus, US President Donald Trump announced a ban on travel from Europe for the next 30 days to the United States, except from the United Kingdoms.